Broker Angela in Duluth manages rental properties for several owners. She collects monthly rent payments totaling $15,000 from tenants in October. Under Minnesota license law, how must Angela handle these rental funds she collects on behalf of property owners?
Correct Answer
A) Angela must deposit the rental funds into a trust account separate from her own funds and disburse them according to her property management agreements
Under Minn. Stat. Ch. 82, a broker acting as a property manager who receives funds on behalf of clients — including rental income — must deposit those funds into a trust account. The funds must be kept separate from the broker's own funds (no commingling) and disbursed in accordance with the property management agreements. This requirement applies to all client funds, not just earnest money from sales transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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